Correlation Between Grupo Simec and 35137LAJ4

Can any of the company-specific risk be diversified away by investing in both Grupo Simec and 35137LAJ4 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grupo Simec and 35137LAJ4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Simec SAB and FOX P, you can compare the effects of market volatilities on Grupo Simec and 35137LAJ4 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grupo Simec with a short position of 35137LAJ4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and 35137LAJ4.

Diversification Opportunities for Grupo Simec and 35137LAJ4

0.07

Correlation Coefficient

Grupo Simec  35137LAJ4

Significant diversification

The 3 months correlation between Grupo and 35137LAJ4 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and FOX P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 35137LAJ4 and Grupo Simec is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grupo Simec SAB are associated (or correlated) with 35137LAJ4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 35137LAJ4 has no effect on the direction of Grupo Simec i.e., Grupo Simec and 35137LAJ4 go up and down completely randomly.

Pair Corralation between Grupo Simec and 35137LAJ4

Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 2.64 times more return on investment than 35137LAJ4. However, Grupo Simec is 2.64 times more volatile than FOX P. It trades about 0.07 of its potential returns per unit of risk. FOX P is currently generating about -0.29 per unit of risk. If you would invest  2,577  in Grupo Simec SAB on September 24, 2024 and sell it today you would earn a total of  75.00  from holding Grupo Simec SAB or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grupo Simec SAB  vs.  FOX P

Grupo Simec SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Simec SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

35137LAJ4

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FOX P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FOX P investors.

Pair Trading with Grupo Simec and 35137LAJ4

The main advantage of trading using opposite Grupo Simec and 35137LAJ4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, 35137LAJ4 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 35137LAJ4 will offset losses from the drop in 35137LAJ4's long position.

The idea behind Grupo Simec SAB and FOX P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.